Overview
First-time home buyers in Canada in 2025 have access to a robust suite of federal and provincial incentives designed to reduce the barriers to homeownership. Recent changes have expanded eligibility, increased support amounts, and introduced new tax relief measures, making it easier to purchase your first home even in a challenging market.
Key Federal Programs and Incentives (2025)
1. Home Buyers’ Plan (HBP)
- Withdraw up to $60,000 tax-free from your RRSP to buy your first home (increased from $35,000 as of April 2024).
- Repayment required over 15 years.
2. First Home Savings Account (FHSA)
- Save up to $40,000 tax-free towards your first home.
- Can be combined with HBP for a total potential down payment exceeding $75,000.
3. Home Buyers’ Amount (Tax Credit)
- Non-refundable tax credit of up to $1,500 for first-time buyers, claimed on your tax return.
4. First-Time Home Buyer Incentive (FTHBI)
- Shared-equity program extended to March 31, 2025.
- Reduces monthly mortgage payments by providing a government equity stake of 5–10% in your home.
- Enhanced eligibility for high-cost markets (Toronto, Vancouver, Victoria) with a higher income cap ($150,000) and increased purchase price limits (up to 4.5x household income).
5. GST/HST Rebate on New Homes (2025 Update)
- Full GST/HST rebate on new homes/condos up to $1 million for first-time buyers.
- Phased out for homes priced between $1 million and $1.5 million.
- Applies to agreements entered after May 26, 2025.
Provincial and Local Incentives
Examples of Additional Support
- Ontario, British Columbia, Quebec: Enhanced land transfer tax rebates and grant programs.
- British Columbia: First Time Home Buyers’ Program reduces or eliminates property transfer tax.
- Local Municipalities: Some offer down payment assistance as interest-free loans or grants. For example, Haldimand and Norfolk (ON) offer up to 10% of the purchase price as a 20-year interest-free loan, with income and price restrictions.
Eligibility Criteria (2025)
- Must be a Canadian resident aged 18 or older.
- Not owned a home in the past 4 years (applies to both you and your spouse/common-law partner).
- Purchase price limits generally under $1,000,000 for most programs, with some programs phasing out benefits up to $1.5 million.
- Must use the home as your primary residence.
- Provincial programs may have additional income or price caps.
Comparison Table: Major Federal Incentives for 2025
| Program | Max Benefit | Key Requirements | Repayment/Limitations |
|---|
| Home Buyers’ Plan (HBP) | $60,000 RRSP withdrawal | First-time buyer, repay in 15 yrs | Must repay to RRSP |
| First Home Savings Account | $40,000 tax-free savings | Canadian resident, first-time buyer | Annual and lifetime limits |
| Home Buyers’ Amount | $1,500 tax credit | Qualifying home, first-time buyer | Non-refundable, one-time |
| FTHBI Shared Equity | 5–10% of home price | Income and price limits | Repay at sale, equity share |
| GST/HST New Home Rebate | Up to $50,000+ (GST/HST) | New construction, up to $1M | Applies to new agreements only |
How to Apply
- FHSA and HBP: Open accounts and apply through your bank or investment platform.
- GST/HST Rebate: File CRA form RC7000 after closing (if eligible).
- FTHBI: Apply through your mortgage lender (most major banks and CMHC-backed lenders participate).
- Provincial/Municipal Rebates: Apply via your provincial land registry office or local housing authority.
Recommendations & Next Steps
- Combine benefits where eligible (e.g., use FHSA savings, HBP withdrawal, and claim the GST rebate).
- Consult a mortgage broker for province-specific guidance and to maximize your eligibility, especially for local grants and rebates.
- Use theratefinder to compare current mortgage rates and programs. Their multi-step application process matches you with competitive rates from top Canadian lenders for residential, commercial, and construction loans. Start your personalized application at theratefinder.ca/onboarding.
Summary
First-time home buyers in Canada in 2025 benefit from increased federal and provincial support, higher withdrawal and savings limits, new tax rebates, and expanded eligibility for shared-equity incentives. Combining these programs can significantly reduce upfront costs and ongoing payments. Carefully review all eligibility criteria and take advantage of rate comparison tools to secure the best mortgage package for your needs.